Slowdown in equities no deterrent to Bursa

KUCHING: Foreign buying momentum of Bursa-listed stocks remained strong last week, which extended the current run to four consecutive weeks despite the long weekend for many bourses around the world.

MIDF Amanah Investment Bank Bhd’s research arm (MIDF Research) noted that for the third week running, the amount of net foreign purchase had exceeded RM1 billion as foreigners bought listed equities amounted to RM1.37 billion.

This is estimated based on transactions in the open market and excluded off market deals.

Foreign investors were net buyers from Monday to Thursday, stretching the buying to 18 consecutive days said the research house noting that the net purchase amount exceeded RM400 million on Monday and Tuesday, but receded thereafter.

On Friday, the flow reversed abruptly as foreigners turned net sellers. However the net outflow was marginal, only RM15 million, with gross trade amounted to only RM255 million.

“We note that the impact of Good Friday on trading activity on Bursa has always been significant. In 2014 and 2015, gross foreign trade on Bursa on Good Friday was only RM346 million and RM351 million respectively, dropping more than 60 per cent compared with that the day before.

“Last Friday was no exception as foreign investors effectively withdrew to the sideline,” said MIDF Research.

For the month until March 25, cumulative net foreign purchases already amounted to RM5 billion.

That was the highest since April 2013, the month before the General Election, when an estimated RM5.17 billion of international portfolio capital made its way to stocks listed on Bursa.

Meanwhile, last week’s foreign purchases boosted the cumulative year-to-date net inflow to RM4.45 billion, compared with RM19.5 billion net outflow for the whole of 2015.

The research house further noted that last week’s foreign participation rate dropped 12 per cent mainly due to the 72 per cent drop on Friday.

The average daily value of shares traded remained above RM1 billion for the fourth consecutive week at RM1.04 billion.

Retail investors finally turned net buyers, the first time in four weeks but participation was still low.

Foreign investors were net buyers from Monday to Thursday, stretching the buying to 18 consecutive days said the research house noting that the net purchase amount exceeded RM400 million on Monday and Tuesday, but receded thereafter.